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S TATE OF RHODE IS L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A CT
RELATING TO TAXATION -- PROPERTY SUBJECT TO TAXATION
Introduced By: Representatives Biah, Hull, J. Lombardi, Morales, DeSimone, Batista,
O'Brien, Diaz, and Slater
Date Introduced: February 22, 2023
Referred To: House Municipal Government & Housing
(City of Providence)
It is enacted by the General Assembly as follows:
1 SECTION 1. Section 44-3-3 of the General Laws in Chapter 44-3 entitled "Property
2 Subject to Taxation" is hereby amended to read as follows:
3 44-3-3. Property exempt.
4 (a) The following property is exempt from taxation:
5 (1) Property belonging to the state, except as provided in § 44-4-4.1;
6 (2) Lands ceded or belonging to the United States;
7 (3) Bonds and other securities issued and exempted from taxation by the government of
8 the United States or of this state;
9 (4) Real estate, used exclusively for military purposes, owned by chartered or incorporated
10 organizations approved by the adjutant general and composed of members of the national guard,
11 the naval militia, or the independent, chartered-military organizations;
12 (5) Buildings for free public schools, buildings for religious worship, and the land upon
13 which they stand and immediately surrounding them, to an extent not exceeding five (5) acres so
14 far as the buildings and land are occupied and used exclusively for religious or educational
15 purposes;
16 (6) Dwellings houses and the land on which they stand, not exceeding one acre in size, or
17 the minimum lot size for zone in which the dwelling house is located, whichever is the greater,
18 owned by, or held in trust for, any religious organization and actually used by its officiating clergy;
19 provided, further, that in the town of Charlestown, where the property previously described in this
1 paragraph is exempt in total, along with dwelling houses and the land on which they stand in
2 Charlestown, not exceeding one acre in size, or the minimum lot size for zone in which the dwelling
3 house is located, whichever is the greater, owned by, or held in trust for, any religious organization
4 and actually used by its officiating clergy, or used as a convent, nunnery, or retreat center by its
5 religious order;
6 (7) Intangible personal property owned by, or held in trust for, any religious or charitable
7 organization, if the principal or income is used or appropriated for religious or charitable purposes;
8 (8) Buildings and personal estate owned by any corporation used for a school, academy, or
9 seminary of learning, and of any incorporated public charitable institution, and the land upon which
10 the buildings stand and immediately surrounding them to an extent not exceeding one acre, so far
11 as they are used exclusively for educational purposes, but no property or estate whatever is hereafter
12 exempt from taxation in any case where any part of its income or profits, or of the business carried
13 on there, is divided among its owners or stockholders; provided, however, that unless any private
14 nonprofit corporation organized as a college or university located in the town of Smithfield reaches
15 a memorandum of agreement with the town of Smithfield, the town of Smithfield shall bill the
16 actual costs for police, fire, and rescue services supplied, unless otherwise reimbursed, to said
17 corporation commencing March 1, 2014;
18 (9) Estates, persons, and families of the president and professors for the time being of
19 Brown University for not more than ten thousand dollars ($10,000) for each officer, the officer’s
20 estate, person, and family included, but only to the extent that any person had claimed and utilized
21 the exemption prior to, and for a period ending, either on or after December 31, 1996;
22 (10) Property especially exempt by charter unless the exemption has been waived in whole
23 or in part; provided that, notwithstanding any provision of a charter or act of incorporation or other
24 law to the contrary, any real and personal property (or portion thereof) of a health care facility,
25 and/or any parent corporation, operator, manager or subsidiary thereof, or of an institution of higher
26 education, that would otherwise be exempted from property taxation that is leased to, subleased to,
27 occupied or used by an entity, organization, or individual that is not itself exempted from property
28 taxation shall be taxed to the tenant, who, for the purposes of taxation is deemed the owner;
29 (11) Lots of land exclusively for burial grounds;
30 (12) Property, real and personal, held for, or by, an incorporated library, society, or any
31 free public library, or any free public library society, so far as the property is held exclusively for
32 library purposes, or for the aid or support of the aged poor, or poor friendless children, or the poor
33 generally, or for a nonprofit hospital for the sick or disabled;
34 (13) Real or personal estate belonging to, or held in trust for, the benefit of incorporated
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1 organizations of veterans of any war in which the United States has been engaged, the parent body
2 of which has been incorporated by act of Congress, to the extent of four hundred thousand dollars
3 ($400,000) if actually used and occupied by the association; provided, that the city council of the
4 city of Cranston may by ordinance exempt the real or personal estate as previously described in
5 this subdivision located within the city of Cranston to the extent of five hundred thousand dollars
6 ($500,000);
7 (14) Property, real and personal, held for, or by, the fraternal corporation, association, or
8 body created to build and maintain a building or buildings for its meetings or the meetings of the
9 general assembly of its members, or subordinate bodies of the fraternity, and for the
10 accommodation of other fraternal bodies or associations, the entire net income of which real and
11 personal property is exclusively applied or to be used to build, furnish, and maintain an asylum or
12 asylums, a home or homes, a school or schools, for the free education or relief of the members of
13 the fraternity, or the relief, support, and care of worthy and indigent members of the fraternity, their
14 wives, widows, or orphans, and any fund given or held for the purpose of public education,
15 almshouses, and the land and buildings used in connection therewith;
16 (15) Real estate and personal property of any incorporated volunteer fire engine company
17 or incorporated volunteer ambulance or rescue corps in active service;
18 (16) The estate of any person who, in the judgment of the assessors, is unable from infirmity
19 or poverty to pay the tax; provided, that in the towns of Burrillville and West Greenwich, the tax
20 shall constitute a lien for five (5) years on the property where the owner is entitled to the exemption.
21 At the expiration of five (5) years, the lien shall be abated in full. Provided, if the property is sold
22 or conveyed, or if debt secured by the property is refinanced during the five-year (5) period, the
23 lien immediately becomes due and payable; any person claiming the exemption aggrieved by an
24 adverse decision of an assessor shall appeal the decision to the local board of tax review and
25 thereafter according to the provisions of § 44-5-26;
26 (17) Household furniture and family stores of a housekeeper in the whole, including
27 clothing, bedding, and other white goods, books, and all other tangible personal property items that
28 are common to the normal household;
29 (18) Improvements made to any real property to provide a shelter and fallout protection
30 from nuclear radiation, to the amount of one thousand five hundred dollars ($1,500); provided, that
31 the improvements meet applicable standards for shelter construction established, from time to time,
32 by the Rhode Island emergency management agency. The improvements are deemed to comply
33 with the provisions of any building code or ordinance with respect to the materials or the methods
34 of construction used and any shelter or its establishment is deemed to comply with the provisions
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1 of any zoning code or ordinance;
2 (19) Aircraft for which the fee required by § 1-4-6 has been paid to the tax administrator;
3 (20) Manufacturer’s inventory.
4 (i) For the purposes of §§ 44-4-10, 44-5-3, 44-5-20, and 44-5-38, a person is deemed to be
5 a manufacturer within a city or town within this state if that person uses any premises, room, or
6 place in it primarily for the purpose of transforming raw materials into a finished product for trade
7 through any or all of the following operations: adapting, altering, finishing, making, and
8 ornamenting; provided, that public utilities; non-regulated power producers commencing
9 commercial operation by selling electricity at retail or taking title to generating facilities on or after
10 July 1, 1997; building and construction contractors; warehousing operations, including distribution
11 bases or outlets of out-of-state manufacturers; and fabricating processes incidental to warehousing
12 or distribution of raw materials, such as alteration of stock for the convenience of a customer; are
13 excluded from this definition;
14 (ii) For the purposes of this section and §§ 44-4-10 and 44-5-38, the term “manufacturer’s
15 inventory,” or any similar term, means and includes the manufacturer’s raw materials, the
16 manufacturer’s work in process, and finished products manufactured by the manufacturer in this
17 state, and not sold, leased, or traded by the manufacturer or its title or right to possession divested;
18 provided, that the term does not include any finished products held by the manufacturer in any retail
19 store or other similar selling place operated by the manufacturer whether or not the retail
20 establishment is located in the same building in which the manufacturer operates the manufacturing
21 plant;
22 (iii) For the purpose of § 44-11-2, a “manufacturer” is a person whose principal business
23 in this state consists of transforming raw materials into a finished product for trade through any or
24 all of the operations described in paragraph (i) of this subdivision. A person will be deemed to be
25 principally engaged if the gross receipts that person derived from the manufacturing operations in
26 this state during the calendar year or fiscal year mentioned in § 44-11-1 amounted to more than
27 fifty percent (50%) of the total gross receipts that person derived from all the business activities in
28 which that person engaged in this state during the taxable year. For the purpose of computing the
29 percentage, gross receipts derived by a manufacturer from the sale, lease, or rental of finished
30 products manufactured by the manufacturer in this state, even though the manufacturer’s store or
31 other selling place may be at a different location from the location of the manufacturer’s
32 manufacturing plant in this state, are deemed to have been derived from manufacturing;
33 (iv) Within the meaning of the preceding paragraphs of this subdivision, the term
34 “manufacturer” also includes persons who are principally engaged in any of the general activities
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1 coded and listed as establishments engaged in manufacturing in the Standard Industrial
2 Classification Manual prepared by the Technical Committee on Industrial Classification, Office of
3 Statistical Standards, Executive Office of the President, United States Bureau of the Budget, as
4 revised from time to time, but eliminating as manufacturers those persons, who, because of their
5 limited type of manufacturing activities, are classified in the manual as falling within the trade
6 rather than an industrial classification of manufacturers. Among those thus eliminated, and
7 accordingly also excluded as manufacturers within the meaning of this paragraph, are persons
8 primarily engaged in selling, to the general public, products produced on the premises from which
9 they are sold, such as neighborhood bakeries, candy stores, ice cream parlors, shade shops, and
10 custom tailors, except, that a person who manufactures bakery products for sale primarily for home
11 delivery, or through one or more non-baking retail outlets, and whether or not retail outlets are
12 operated by the person, is a manufacturer within the meaning of this paragraph;
13 (v) The term “Person” means and includes, as appropriate, a person, partnership, or
14 corporation; and
15 (vi) The department of revenue shall provide to the local assessors any assistance that is
16 necessary in determining the proper application of the definitions in this subdivision;
17 (21) Real and tangible personal property acquired to provide a treatment facility used
18 primarily to control the pollution or contamination of the waters or the air of the state, as defined
19 in chapter 12 of title 46 and chapter 25 of title 23, respectively, the facility having been constructed,
20 reconstructed, erected, installed, or acquired in furtherance of federal or state requirements or
21 standards for the control of water or air pollution or contamination, and certified as approved in an
22 order entered by the director of environmental management. The property is exempt as long as it is
23 operated properly in compliance with the order of approval of the director of environmental
24 management; provided, that any grant of the exemption by the director of environmental
25 management in excess of ten (10) years is approved by the city or town in which the property is
26 situated. This provision applies only to water and air pollution control properties and facilities
27 installed for the treatment of waste waters and air contaminants resulting from industrial
28 processing; furthermore, it applies only to water or air pollution control properties and facilities
29 placed in operation for the first time after April 13, 1970;
30 (22) Manufacturing machinery and equipment acquired or used by a manufacturer after
31 December 31, 1974. Manufacturing machinery and equipment is defined as:
32 (i) Machinery and equipment used exclusively in the actual manufacture or conversion of
33 raw materials or goods in the process of manufacture by a manufacturer, as defined in subdivision
34 (20), and machinery, fixtures, and equipment used exclusively by a manufacturer for research and
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1 development or for quality assurance of its manufactured products;
2 (ii) Machinery and equipment that is partially used in the actual manufacture or conversion
3 of raw materials or goods in process of manufacture by a manufacturer, as defined in subdivision
4 (20), and machinery, fixtures, and equipment used by a manufacturer for research and development
5 or for quality assurance of its manufactured products, to the extent to which the machinery and
6 equipment is used for the manufacturing processes, research and development, or quality assurance.
7 In the instances where machinery and equipment is used in both manufacturing and/or research and
8 development and/or quality assurance activities and non-manufacturing activities, the assessment
9 on machinery and equipment is prorated by applying the percentage of usage of the equipment for
10 the manufacturing, research and development, and quality-assurance activity to the value of the
11 machinery and equipment for purposes of taxation, and the portion of the value used for
12 manufacturing, research and development, and quality assurance is exempt from taxation. The
13 burden of demonstrating this percentage usage of machinery and equipment for manufacturing and
14 for research and development and/or quality assurance of its manufactured products rests with the
15 manufacturer; and
16 (iii) Machinery and equipment described in §§ 44-18-30(7) and 44-18-30(22) that was
17 purchased after July 1, 1997; provided that the city or town council of the city or town in which the
18 machinery and equipment is located adopts an ordinance exempting the machinery and equipment
19 from taxation. For purposes of this subsection, city councils and town councils of any municipality
20 may, by ordinance, wholly or partially exempt from taxation the machinery and equipment
21 discussed in this subsection for the period of time established in the ordinance and may, by
22 ordinance, establish the procedures for taxpayers to avail themselves of the benefit of any
23 exemption permitted under this section; provided, that the ordinance does not apply to any
24 machinery or equipment of a business, subsidiary, or any affiliated business that locates or relocates
25 from a city or town in this state to another city or town in the state;
26 (23) Precious metal bullion, meaning any elementary metal that has been put through a
27 process of melting or refining, and that is in a state or condition that its value depends upon its
28 content and not its form. The term does not include fabricated precious metal that has been
29 processed or manufactured for some one or more specific and customary industrial, professional,
30 or artistic uses;
31 (24) Hydroelectric power-generation equipment, which includes, but is not limited to,
32 turbines, generators, switchgear, controls, m